17EdTech Has Regained Compliance with Nasdaq’s Minimum Bid Price Requirement

Rhea-AI Summary

17 Education & Technology Group Inc. (Nasdaq: YQ) has successfully regained compliance with the Nasdaq Listing Rule 5450(a)(1) and closed the matter related to the minimum bid price requirement. The company changed the ratio of its ADSs representing its Class A ordinary shares, which became effective on December 18, 2023, leading to the closing bid price of the Company’s ADSs being at $1.00 per ADS or greater for 11 consecutive business days from December 18, 2023, through January 3, 2024.

Insights

Financial Analyst

The announcement from 17 Education & Technology Group Inc. regarding their regained compliance with the Nasdaq Minimum Bid Price Requirement signifies a crucial turn in their financial standing. The strategic maneuver of altering the ADS ratio to elevate the bid price above the $1.00 threshold is a common tactic known as a reverse stock split. This move can have both positive and negative implications.

On the positive side, maintaining the listing on a major exchange like Nasdaq ensures continued visibility and access to a broad pool of institutional investors, which can be vital for capital raising activities. It also avoids the stigma associated with being listed on a less prestigious exchange. However, it's important to note that a reverse stock split does not inherently change the company's market capitalization or operational performance. Investors often view such actions skeptically as they can be indicative of underlying financial challenges.

For stakeholders, the short-term relief of meeting listing requirements may be overshadowed by the long-term concerns about the company's ability to improve its fundamental performance. Investors should monitor subsequent financial results and operational updates to assess the effectiveness of the company's strategy and its impact on shareholder value.

Market Research Analyst

The compliance with Nasdaq's Minimum Bid Price Requirement by 17 Education & Technology Group Inc. reflects the company's proactive approach to addressing stock market regulatory challenges. This development is relevant to the education technology sector, which has been under intense scrutiny in China due to regulatory changes affecting private education companies.

The sector is highly sensitive to regulatory environments and companies must navigate these with agility to maintain investor confidence. The successful navigation of the Nasdaq's requirements may suggest that 17EdTech is positioning itself to adapt to broader regulatory changes within China's education sector. This could potentially signal to investors a degree of resilience and capacity for strategic pivots, which is critical in the volatile EdTech market.

However, the long-term success of 17EdTech will likely depend on the company's ability to innovate and differentiate its offerings in a competitive market, as well as its capacity to align with China's regulatory framework for education. The company's future announcements regarding user growth, product development and partnerships will be key indicators to watch.

BEIJING, Jan. 05, 2024 (GLOBE NEWSWIRE) -- 17 Education & Technology Group Inc. (Nasdaq: YQ) (“17EdTech” or the “Company”), a leading education technology company in China, today announced that it received a notification letter (the “Compliance Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) dated January 4, 2024, indicating that the Company has regained compliance with the Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”) and the matter is closed.

On August 3, 2023, 17EdTech received a notification letter (the “Deficiency Notice”) from the Nasdaq indicating that the closing bid price for the Company’s American depositary shares (“ADSs”) was below the minimum bid price of $1.00 required for continued listing under Nasdaq Listing Rule 5450(a)(1) for 30 consecutive business days. According to the Deficiency Notice, if at any time during the 180 day compliance period, the closing bid price of the Company’s security is at least $1.00 for a minimum of ten consecutive business days, Nasdaq will provide the Company written confirmation of compliance and the matter will be closed. In order to regain compliance with the Minimum Bid Price Requirement, the Company changed the ratio of its ADSs representing its Class A ordinary shares from one (1) ADS representing (10) Class A ordinary shares to one (1) ADS representing fifty (50) Class A ordinary shares. The change became effective on December 18, 2023. According to the Compliance Notice, the closing bid price of the Company’s ADSs has been at $1.00 per ADS or greater for 11 consecutive business days from December 18, 2023 through January 3, 2024, and the Company has regained compliance with the Minimum Bid Price Requirement and the matter is closed.

About 17 Education & Technology Group Inc.

17 Education & Technology Group Inc. is a leading education technology company in China, offering smart in-school classroom solution that delivers data-driven teaching, learning and assessment products to teachers, students and parents. Leveraging its extensive knowledge and expertise obtained from in-school business over the past decade, the Company provides teaching and learning SaaS offerings to facilitate the digital transformation and upgrade at Chinese schools, with a focus on improving the efficiency and effectiveness of core teaching and learning scenarios such as homework assignments and in-class teaching. The product utilizes the Company’s technology and data insights to provide personalized and targeted learning and exercise content that is aimed at improving students’ learning efficiency.

For investor and media inquiries, please contact:

17 Education & Technology Group Inc.

Ms Lara Zhao
Investor Relations Manager
E-mail: ir@17zuoye.com

FAQ

What notification did 17 Education & Technology Group Inc. (Nasdaq: YQ) receive from the Nasdaq Listing Qualifications Department?

The company received a notification letter (the “Compliance Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC indicating that it has regained compliance with the Nasdaq Listing Rule 5450(a)(1) and the matter is closed.

When did the Company change the ratio of its ADSs representing its Class A ordinary shares?

The company changed the ratio of its ADSs representing its Class A ordinary shares on December 18, 2023.

What was the closing bid price of the Company’s ADSs from December 18, 2023, through January 3, 2024?

The closing bid price of the Company’s ADSs was at $1.00 per ADS or greater for 11 consecutive business days from December 18, 2023, through January 3, 2024.